Diplomatic circles were keyed up more
than usual. The occasion: a meeting between the Indian
and Pakistani foreign ministers in Delhi in early
September. The reason: a new element had been added this
time to the usual anticipation surrounding such
high-level interactions between the two nuclear
neighbors - a natural gas pipeline project.

Most
felt the time had come for the two rivals to join in a
common gas endeavor. A joint statement issued after the
talks in Delhi reflected as much. "In our discussions,
we recognized the importance of availability and access
to energy resources in the region around South Asia. We
have agreed that the ministers of petroleum and gas
could meet to discuss the issue in its multifarious
dimensions."

Some Indian commentators view the
pipeline as a "peace pipeline", implying its potential
as a confidence-building measure (CBM) for the two
countries, despite their deep differences. Others have
lauded it as a "win-win geo-economic" idea for both
India and Pakistan. But, alas, there was nothing more
than the carefully-worded diplomatese on what many
thought would be the mother of all CBMs. The foreign
ministers just wouldn't go any further, but it was more
than mutual suspicion that prevented them from doing so.
There was more at play here - geopolitics.

What
the two couldn't agree on was whether they would go for
a Iran-Pakistan-India pipeline or a
Turkmenistan-Afghanistan-Pakistan (TAP) pipeline, also
known as the Trans Afghan Pipeline. While the proposed
TAP project would supply natural gas from the Daulatabad
fields in southeast Turkmenistan (a sovereign nation in
Central Asia that has broken away from the erstwhile
Soviet Union) to Afghanistan, Pakistan and then on to
India, the Iran-Pakistan-India line would deliver the
gas from Iran to India through Pakistan.

The
United States is keenly interested in the sourcing of
natural gas supplies for the rapidly growing Indian
market. Early September, the US Trade Development Agency
signed an agreement with the Gas Authority of India for
its partial funding (US$700,000) of a feasibility study
for a natural gas grid in India. The US has thereby
underlined its keenness to be involved in India's
multi-billion dollar market for gas distribution.

Like India, Pakistan also has choices to make.
Pakistan has been working on both the TAP and the
Iran-Pakistan-India pipeline project. According to
Pakistan's oil ministry, its demand for natural gas is
expected to grow at about 6% annually. Pakistan's oil
minister went on record in August as saying that by the
end of the year, Islamabad hoped to prioritize between
the TAP, the Iranian project and an altogether third
variant, namely, an Oman-Pakistan gas pipeline project.

The main problem with the Iran-India pipeline is
that the US is likely to come down heavily on any
country that aspires to enter into a collaboration with
Iran in the energy sector. The geopolitical reality is
that any significant involvement of Iran at the moment
in any grand venture would require the tacit agreement
of the US and Israel. The two would see any development
that could accrue to Iran's strategic power as very much
their business until such time as they have quite
figured out the "Iran question".

From the
American and Israeli point of view, Iran is making an
unprecedented bid for regional power, which poses
challenges to their vital geostrategic interests in the
Gulf region. Americans are thus keenly tracking all
developments that could have a bearing on Iran's
strategic environment. Turkey, Russia, the European
Union and Japan, all are have been put on notice
recently on their possible collaboration with Iran.
Would India and Pakistan escape notice?

Iranian
President Mohammad Khatami drew attention to this
geopolitical reality when he pointedly said at a press
conference at Dushanbe, Tajikistan recently: "We are
certain that all of the region's powers must keep up
good relations, and this will allow the regional powers
to stand up against the ambitions of certain countries."

Earlier, the US had been frank about its
expectations that a Taliban regime in Afghanistan would
stabilize the country and thereby facilitate the TAP to
India through Pakistan. American energy firms had even
opened offices in Delhi in the 1990s in anticipation of
the TAP's huge downstream business potential. Soon after
the Taliban's ouster in 2001, the US signaled that once
Hamid Karzai's interim regime managed to bring about
some stability, the TAP would be revived. Some skeptics
actually hold that the prime motive for the US
intervention in Afghanistan in 2001 had much to do with
considerations centered around the transportation of
Caspian oil and gas reserves to the international market
via a route minus Russia and Iran.

At any rate,
the US had hoped to make good the TAP once the
presidential election in Afghanistan to legitimize the
Karzai government was out of the way. Elections are due
on October 9. The Asian Development Bank, which
undertook a feasibility study of TAP, recently confirmed
that paperwork on the project was complete and that gas
supplies could reach Pakistan by 2010.

Meanwhile, Russia's shadow was beginning to
appear behind TAP. The Americans had all along
predicated TAP on the belief that it would bring
unlimited access to Turkmenistan's formidable Daulatabad
gas reserves. But last April, while the stabilization of
the Karzai regime was still to be conclusively clinched
and the shadows of Iraq were lengthening, Russia entered
into a 25-year natural gas agreement with Turkmenistan
that effectively put it in control of Turkmen gas, as
well as its transportation and marketing. The deal,
dubbed by world energy circles as "the gas deal of the
century", casts Russia in the role of a market leader in
natural gas sales.

Clearly, if TAP's original
objective was to bypass Russia in the evacuation of
Turkmen gas, that has been rendered unrealistic. The
million-dollar question now is whether the Americans
would strive to transform the TAP into a joint
US-Russian project. But that calls for a period of
detente in the Great Game.

There are other
angles to the equation. Russia would like to make
decisions in its energy alliances in its medium- and
long-term foreign policy interests. Russia's focus is
unmistakably on the marketing of Turkmen gas in the
Russian and European markets. By this approach, in
geopolitical terms, Russia hopes to find itself in a
commanding position as the supply source of natural gas
for West Europe (36% as of now) and Central Europe (over
50%).

Russia is buying Turkmen gas at half the
international price. The price differential enables
Russia to subsidize its own domestic consumers and
thereby stimulate the Russian economy, especially its
industry. Also, Russia uses Turkmen gas to top up its
quantum of gas exports to West Europe, giving itself the
much-needed breathing space for the technical
upgradation of its northern Yamal and Shtokman gas
fields.

Russia would arguably like to take part
in the exploitation of Iran's giant South Pars gas
fields and for directing future sales of the Iranian gas
to India. This would be both expedient as well as
geostrategically sound. Expediency suggests that Iran
does not compete with Russia for the European market. At
the same time, an Iranian gas pipeline with Russian
backing or participation heading toward India through
Pakistani territory would have been, ideally, quite in
consonance with the Russian vision of a multipolar
world, apart from strengthening Russia's strategic
partnership with India. But the very idea would run into
American opposition.

The India-Pakistan joint
statement has therefore carefully flagged the
"multifarious dimensions" of the saga of energy
pipelines for the two south Asian countries. The
circumspection is only natural.

M K
Bhadrakumar was a career diplomat in the Indian
Foreign Service for 30 years.